On hierarchical competition in oligopoly

Ludovic Julien (), Olivier Musy and Aurélien Saïdi ()
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Aurélien Saïdi: EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique

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Abstract: In this paper, we consider a hierarchical oligopoly model, in which firms compete on quantities of an homogeneous product. We provide a proof and an interpretation that under the three necessary and sufficient conditions of linear aggregate demand, constant and identical marginal costs, the strategy of leaders at any stage depends neither on the number of leaders who play after nor on the number of remaining stages. So, all firms behave as Cournotian oligopolists on the residual demand. We show that these three assumptions are not only sufficient but also necessary. Any departure from any of these assumptions rules out this property.

Keywords: Hierarchical model; Linear economy; Oligopoly competition (search for similar items in EconPapers)
Date: 2012
Note: View the original document on HAL open archive server: https://hal.parisnanterre.fr/hal-01385836v1
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Citations: View citations in EconPapers (4)

Published in Journal of Economics, 2012, 3 (107), pp.217-237. ⟨10.1007/s00712-012-0286-4⟩

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Journal Article: On hierarchical competition in oligopoly (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01385836

DOI: 10.1007/s00712-012-0286-4

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